Brazil's Trade Liberalization and Growth: Has it Failed?

INTAL-ITD Occasional Paper No. 24

31 Pages Posted: 10 Feb 2004

See all articles by Mauricio Mesquita Moreira

Mauricio Mesquita Moreira

Inter-American Development Bank (IDB) - Regional Integration

Date Written: January 2004

Abstract

Unfulfilled expectations about economic growth in Brazil has led many observers to question the ability of the new, open trade regime to put the economy back on an path of sustainable growth. Whereas the country's growth record has been really poor, the evidence suggests that the underlying causes had nothing to do with trade. Quite the contrary. This paper shows that trade liberalization has given an important contribution to two of the main drivers of growth: productivity and investment in physical capital. It argues that these gains were not turned into growth due to an unfavorable macro and institutional environment. It also claims that Brazil could have enjoyed more gains from trade, had it pursued a more aggressive trade policy at home and abroad. The paper concludes by outlining the main issues of a pro-growth, trade policy agenda for the country.

Keywords: Brazil, trade, growth

JEL Classification: F13, O54

Suggested Citation

Mesquita Moreira, Mauricio, Brazil's Trade Liberalization and Growth: Has it Failed? (January 2004). INTAL-ITD Occasional Paper No. 24, Available at SSRN: https://ssrn.com/abstract=497942 or http://dx.doi.org/10.2139/ssrn.497942

Mauricio Mesquita Moreira (Contact Author)

Inter-American Development Bank (IDB) - Regional Integration ( email )

1300 New York Avenue, NW
Washington, DC 20577
United States
202-6233931 (Phone)

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